Charter schoolteachers fear IRS rules change

Proposal affects pension eligibility

Published: 02/15/2012 at 12:16 PM

(WASHINGTONTIMES) — A little-noticed proposed change in Internal Revenue Service regulations could have devastating effects for charter school teachers by making them ineligible for state retirement plans, and they could stand to lose much of the money that they already have accrued.

The proposed rule, released with little fanfare near the end of last year, would make major changes to the definition of “governmental plans,” the federal standard for who can be considered a government employee for the purposes of participating in state pension systems.

“The IRS did not have charter schools in their sights, but whether they had them in their sights or not, it could have negative consequences for us,” said Todd Ziebarth, vice president for state advocacy and support at the National Alliance for Public Charter Schools. “Our concern is that this could raise some questions. It’s a gray area around whether charters would meet the test.”